Reducing your debt is one of the most important steps in creating wealth.
Since the 1970’s when the credit card was first introduced, consumer debt has skyrocketed in Canada and the US. It has become an epidemic, with millions of people depending on their credit just to get by. Debt for Canadians and people all over the world has become the norm.
Why is this happening? The answer is that we are looking to material things to provide us happiness. We are buying new toys, bigger TVs, and the best cars before we can afford it. We live with the attitude that we must always have the best of everything in order to consider ourselves happy. The problem is that by doing this, we are holding ourselves back from having the lives that we will always dream of. We are digging ourselves into a hole that is almost impossible to dig out of. Living this way, we will be forever paying for the things we buy.
Experts say that many people who look rich (fancy cars, big expensive houses) are actually drowning in debt and living above their means.
Don’t give your money to large corporations; instead put your money to work for you. You do not have to have a new car, why not buy a pre-owned car for a third of the price and be that much further ahead? It is better to save up for a couple months to buy something you want than to spend the rest of your life paying for it. Never forget that you are borrowing money and that you will have to pay it back with interest.
Debt and the future
A few years ago, interest rates reached an all time low. As a result, consumers began charging up their debt at record speed. This creates a dangerous situation because a jump in interest rates could prove to be disastrous for some people. If you are having trouble paying your bills while interest rates are low, then what will you do when they go up?
Experts say that Canadians are so in debt that raising interest rates would have a detrimental impact on our economy. For this reason, interest rates are likely to stay low for years to come. Take advantage of the situation and get out of debt now while you can. This means you have a chance to pay off your debt and get your finances under control…don’t waste it!
A credit card can be your friend with proper use but you are right that too many people don’t use credit cards to their advantage.
On my site I am trying to help educate people on steps to eliminate debt so they can use their credit cards wisely, possibly even to make money.